Place pecans and 1/4 cup butter in a baking pan. Bake at 350° for 20-25 minutes or until toasted, stirring frequently; set aside.
In a large bowl, cream sugar and remaining butter until light and fluffy. Add eggs, one at a time, beating well after each addition. Stir in vanilla. Combine the flour, baking powder and salt; add to the creamed mixture alternately with milk, beating well after each addition. Stir in 1-1/3 cups of toasted pecans.
Pour into three greased and floured 9-in. round baking pans. Bake at 350° for 25-30 minutes or until a toothpick inserted near the center comes out clean. Cool for 10 minutes before removing from pans to wire racks to cool completely.
For frosting, cream butter and confectioners' sugar in a large bowl. Add milk and vanilla; beat until smooth. Stir in remaining toasted pecans. Spread frosting between layers and over top and sides of cake